Regulation of electricity utilities – sales of power

Approval to sell power

What authorisations are required for the sale of power to customers and which authorities grant such approvals?

Sale of power to final customers (supply) may be regulated (public service) or market activity. Supply of power under regulated terms is performed as universal service (to households) or as a last-resort service (to entrepreneurs).

Both types of suppliers (regulated and market) have to obtain their energy licences for supply of power to customers from HERA. In addition, a supplier under regulated terms is awarded a public service obligation by decision of the government.

Power sales tariffs

Is there any tariff or other regulation regarding power sales?

Croatia’s power sales market has been fully open since 1 July 2008, meaning that all customers have acquired ‘eligible customer status’. This means that all customers have the legal right to choose their electricity supplier and freely contract the quantity and price of the supplied electricity.

Tariffs are regulated only with respect to supply of electricity as a last-resort service (see question 18). Power sales tariffs are set by the following regulations rendered by HERA: Methodology for Calculation of Tariffs for Electricity Supply as Last-Resort Service (Official Gazette No. 158/13) and Decision on Tariffs for Last-Resort Electricity Supply (Official Gazette No. 50/18).

Even though the market is opened and competitors offer lower prices, a large number of customers have still not chosen their supplier and are still supplied by HEP-ODS (last-resort supplier). In order to encourage customers to choose their market supplier, based on the aforementioned methodologies and tariffs, entrepreneurs supplied by HEP-ODS have been paying 20 to 50 per cent higher prices since 1 July 2014.

Rates for wholesale of power

Who determines the rates for sales of wholesale power and what standard does that entity apply?

Croatia does not regulate rates for sales of wholesale power; it is a market activity and all prices are freely negotiated. HEP dd is negotiating power wholesale rates with other electricity companies in the region through tenders.

Public service obligations

To what extent are electricity utilities that sell power subject to public service obligations?

Public service obligations exist with regard to household customers who opted for or automatically use the universal service and in relation to the last-resort supply to entrepreneurs (ie, in the event of failure of the electricity supplier).

HEP-ODS d.o.o is nominated as the universal service and last-resort supplier.